Chapter 9. Engaging local employers in skills development and utilisation in the Philippines

This case study presents the learnings from a new initiative from the Philippine public skills development programme that targets disadvantaged populations to build skills that are in demand by the private sector. The programme aims to create new partnerships between training providers, industry associations and disadvantaged groups in order to rapidly respond to emerging skills needs at the local level from employers.

  

KEY FINDINGS

• The Philippines is a large and complex economy with a variety of labour market challenges. A large percentage of the population is informally employed, and employers report skills deficits while high rates of unemployment amongst post-secondary graduates. Issues regarding the appropriate recognition, certification and utilisation of skills have emerged as barriers as the country’s economic structure transitions away from agrarian production.

• The Philippines has existing capacity issues with respect to the provision of public employment services. However, in recent years, the government has increased its focus on the need to develop skills, particularly vocational skills, amongst the labour force.

• Consequently, the federal government has invested significantly in the Training for Work Scholarship Program, which funds grants for young unemployed people with little or no formal education to pursue vocational education through a training provider at the local level.

Background

Every Filipino family’s dream is for their children to get a good education, find a decent job and improve their quality of life. In the Social Contract, which former President Benigno Simeon Aquino III made with the Filipino People, the country is envisioned, among others, to be “… A country with an organized and widely-shared rapid expansion of our economy through a government dedicated to honing and mobilizing our people’s skills and energies…” (Executive Order No. 43, S. 2011).

The Philippine Development Plan 2011-16 provides the framework to achieve sustained and inclusive growth, address poverty and create massive employment opportunities. The Philippine Labor and Employment Plan 2011-16 identifies the strategies and programmes that will improve employment levels and access to employment opportunities. The National Technical Education and Skills Development Plan (NTESDP) 2011-16 seeks to contribute to achieving the vision of inclusive growth through the improved provision of technical vocational education and training (TVET). It envisions a 21st century skilled Filipino workforce with the following characteristics: technically competent; innovative and creative; knowledge-based; with higher order thinking skills; with foundational life skills; in pursuit of lifelong learning opportunities; and possessing desirable work attitudes and behaviours.

One of the major objectives of the NTESDP 2011-16 is to improve the responsiveness and relevance of training through a closer linkage between the world of learning and the world of work. Among the major strategies to be pursued are:

• Develop public-private partnerships in TVET, especially in TVET development, financing, labour market information, standards setting, assessment and certification;

• Expand enterprise-based training by strengthening enterprise-based training schemes such as apprenticeship and dual training systems and workplace training for skills upgrading, retooling and multi-skilling.

• Strengthen linkages with employers to hire TVET graduates and recognise the importance of OJT and certification.

• Provisions for creative incentives and rewards to generate wider industry support such as technical assistance and capability building interventions.

• Expand and purposively direct scholarships and other training assistance to critical and hard-to-find skills and higher technologies and use the programme to incentivise the TVIs.

This Chapter attempts to review and highlight outcomes and best practices in employer engagement and participation in skills development and utilisation under the Training for Work Scholarship Program (TWSP). Under this programme, TESDA partners with technical vocational institutes (TVIs), employers and industry associations (IAs) in the delivery and implementation of training programmes that addresses priority skills needed by the private sector. The target beneficiaries of TWSP are young people who are unemployed, poor and disadvantaged.

Key Labour Market Challenges

In 2010, the population of the Philippines was 92 337 852. At present, it is estimated that the population of the country has reached 102 million with an estimate rate of population growth at 2.1%, one of the highest in Asia. This high rate has put pressure on the labour market.

However, during the mid-term assessment of the Philippine Development Plan (PDP), Secretary Arsenio Balisacan, Director General of the National Economic and Development Authority (NEDA), reported that the unemployment rate declined to 6.5% in the first three quarters of 2015. This unemployment rate and underemployment rate of 18.4% in 2014 are the lowest in 10 years (NEDA, 2015). The International Labor Organisation (ILO) also reported that the Philippine economy grew by 7.2% in 2013 and 6.1% in 2014. The total number of people employed is now 38.1 million, a sizable increase of four million since 2008. The report also highlighted that vulnerable employment, a measure of the quality of employment, declined from 43.5% in 2008 to 38.3% in 2013. Similarly, the rate of poverty among Filipino workers saw a modest decline from 22.9% in 2006 to 21.9% in 2012 (ILO, 2015).

Youth Unemployment

Youth unemployment continues to be a major challenge. In 2010, youth (aged 15 to 24) comprised only one-fifth (21.3 %) of the labour force but more than half (51.1%) of the total unemployed (ILO, 2012). Unemployment is still highest among young people, who comprise almost half of the total population of unemployed people (PSA, 2015).

Educated Unemployed Phenomenon

The Philippine labour force is highly educated. The portion of the unemployed who are educated, namely those with secondary, post-secondary and tertiary education, has increased from 74.2% in 1995 to 86% in 2010 (ILO, 2012). This situation continues to be reflected in the current labour statistics of October 2015. About 89% of the total population of unemployed people are graduates of secondary and tertiary education. One contributing factor may be the easy access to education. The country has 2 080 higher education institutions, of which 607 state-run colleges and universities and 1 573 private institutions. College education is subsidised or even free in state-run colleges and universities. However, many of these institutions are often referred to as “diploma mills.” This may explain why 400 000 young people who graduate from college every year are unable to find jobs.

Overseas Filipino workers

Another complexity is the integration of the domestic labour market with the global market. According to the Department of Labor and Employment (DOLE), there are 12 million overseas Filipino workers (OFWs) all over the world. The annual remittances of OFWs, estimated at PHP 173.2 billion (USD 37 billion), is the second largest contributor to foreign exchange earnings (PSA, 2015).

Many studies have raised concerns about the social costs of overseas employment, which include human trafficking and illegal recruitment. The majority of OFWs are women and about a third of OFWs are in vulnerable and difficult work situations. Global developments affecting the economies of oil-producing countries in the Middle East where many OFWs are currently employed has prompted fears about the potential massive return of OFWs and the need for their re-integration into the domestic Philippine labour market.

Shifts in the Philippine Economy

The Philippine economy has also been undergoing major structural change through a distinct shift of resources towards the services sector. The services sector employs 21.7 million or 55% of the total employed. Employment in the industry sector was 16.5% in 2015 but has fallen as low as 15%, while employment in the agriculture sector is 28% (PSA, 2015). Several other countries in ASEAN pursued economic development through the development of the secondary sector. The lack of a solid and growing industrial base has been criticised as the root cause of the country’s high unemployment and sluggish rate of poverty reduction (ILO, 2012).

There are about 945 000 establishments in the country. Of these, 86% are services enterprises, 13% are industrial businesses and 1% are agricultural industries. Approximately 90% of all enterprises are micro establishments with fewer than ten employees (PSA, 2012).

Social inclusion

The Philippines has persistent challenges regarding poverty and social inclusion. The income of the richest 20% is 8.4 times that of the poorest 20%, which is comparatively higher than regional neighbours including Thailand (6.9), Viet Nam (6.0) and Sri Lanka (5.8) (Cielito Habito, 2015). Over 1.8 million children are engaged in work and the average real daily wage has declined over time. A significant proportion of workers receive earnings that are insufficient to meet their basic needs and elevate themselves above poverty (ILO, 2012).

To eradicate extreme poverty, the Philippine government embarked on a conditional cash transfer (CCT) programme by investing in health and education, particularly for children under 14 years old. A budget of PHP 64 billion (USD 1.48 billion) was allocated to this programme in 2015. According to the Asian Development Bank, this is the third largest cash transfer programme in the world.

Private Sector Engagement in TVET

In the late seventies, the then National Manpower and Youth Council (now the Technical Education and Skills Development Authority, “TESDA”) established Industry Boards (IBs), which represent different sub-sections of the economy’s industrial sector. It also established Industry Associations (IAs), which group together institutions and individual in the same line of business or profession. IAs and IBs directly partnered with the National Manpower and Youth Council to deliver various assistance programmes for skills development. The first IB was established for the tourism sector, and a further ten were developed over the following twenty years to represent almost 25 000 firms and over three million workers. The IBs were initially publically funded but this arrangement was ceased in the late 1990s.

TESDA is legislatively obliged to establish effective and efficient institutional arrangements with IBs and IAs to facilitate the participation of employers and workers in skills development. TESDA also has a mandate to formulate a comprehensive development plan for middle-level manpower, which would encompass industry-based training programmes including apprenticeships, dual training systems and other similar schemes. Relatedly, the administration of the apprenticeship system was transferred from the Department of Labor and Employment (DOLE) to TESDA. While TESDA has the legislative authority to implement levy and grant schemes for skills development, private sector partners are not in favour of such mechanisms as they contribute to the already high cost of doing business.

Private sector participation in TVET is institutionalised in the policy making process. Fourteen of the 22 members of the highest policy making body, the TESDA Board, are from the private sector. Of these, six are from the labour sector, four are from employers groups, two are representatives from the business and investment sector, and two are from the associations of private technical vocational institutes. At the local level, the private sector is also represented on Regional and Provincial Technical and Skills Development Committees.

Similarly, employers are involved in programme development through their participation in the process of developing Training Regulations (TRs), which outline the minimum programme and training standards for occupational qualification levels. The private sector is also involved in the formulation of skills plans and the development of competency standards and assessment and certification instruments. In terms of program implementation, the private sector participates in the conduct of industry-based training programmes like the dual-training system, apprenticeship programme and on-the-job-training (OJT) programmes (TESDA Planning Office, 2015).

Under the Rationalization Program of the government in 2012, TESDA created the Office of Partnerships and Linkages, which aims to strengthen TESDA’s relationships with its major stakeholders. TESDA developed a framework for private sector participation wherein each office of TESDA was made responsible for specific concerns to promote partnership and linkages.

The participation of the private sector in skills development and skills utilisation remains a major challenge for TESDA. While enterprise-based training is widely accepted as an effective mode of training delivery, the Impact Evaluation Study (IES) of TVET programmes indicates that the number of enterprises (about 400) and graduates of enterprise-based training are not increasing. The percentage of graduates in enterprise-based training has declined slightly from 5.6% in 2008 to 5.4% in 2013. Of a total of 788 439 graduates in 2013, only 42 542 completed enterprise-based training. It should be noted that these reports show that enterprise-based training has consistently yielded higher employment rates than the two other modes of training, which are institution- and community-based trainings.

The Training for Work Scholarship Programme

The Training for Work Scholarship Programme (TWSP) was launched in 2006 as a response to persistent structural unemployment. The TWSP aimed to provide local and overseas Filipino workers with scholarship grants in order to fund training. At its initiation, PHP 500 million (USD 10.6 million) was provided to fund 100 000 scholarship grants that covered full or partial training costs (Orbeta and Abrigo, June 2011).

The TWSP was subsequently expanded in 2009 as part of the government’s Economic Resiliency Plan (ERP) in response to the Global Financial Crisis in 2008. Under the ERP, the allocation for TESDA for TWSP increased by PHP 2 billion (USD 43 million) in 2009 (ADB, 2010). The total funding for the TWSP from 2006 to 2015 was approximately PHP 15 billion (USD 320 million). In the present TWSP Implementing Guidelines issued in 5 January 2015, the objectives of the programme are as follows:

The TWSP shall continue to be directed towards filling up the skills gap and job requirements of priority industries and sectors with high employment demand, improving the reach of quality TVET to the grassroots and encouraging technical-vocational institutions to offer programs in higher qualifications catering to in-demand industry requirements. This shall be supportive of the government’s thrust of rapid, inclusive and sustained economic growth.

The main beneficiaries of the TWSP are those who are unemployed, over 18 years old, have no formal or vocational training and are from regions and provinces with high incidence of poverty. The scholarship grant covers the cost of training, assessment and certification. The training cost per course is determined by TESDA.

The TWSP is conducted through over 4 000 technical and vocational institutions (TVIs) across the country, 90% of which are private TVIs. The TVIs must be registered with TESDA and must reach a minimum threshold of completion rate, certification rate, employment rate and other criteria set by TESDA. The training providers are expected to facilitate the tracking and job placement of their graduates. They must commit to an employment rate of at least 60% of the trainees within six months to one year of graduation. Some TVIs are based in IAs or within specific firms.

TESDA aims to pursue partnership agreements with industry associations/bodies/groups shall be pursued and encouraged. Such arrangements shall focus on identification of priority qualifications/programmes, conduct of training programmes, selection of qualified TVIs, commitments on employment rates (which vary across the IAs) and facilitation of employment of TWSP graduates. There is also a provision for the creation of a Training Development Fund (TDF) to be managed by the concerned IA, which shall come from the minimum amount of 10% per voucher allocation for every hired graduate. This is supposedly a fund replenishment scheme to extend the mileage of the scholarship programme.

TESDA has partnered with eleven IAs in key employment generating sectors to implement TWSP. These sectors include the software, health management outsourcing, plumbing engineering and electronics industries. For this case study, representatives from the Information Business Processing Association of the Philippines (IBPAP); the Philippine Software Industry Association (PSIA); the Semiconductor and Electronics Industry in the Philippines (SEIPI); and the Philippine Society of Plumbing Engineers, Inc. (PSPE) were interviewed.

Impacts of the Programme

Number of graduates and employment rates

To date, the TWSP has reached and benefitted over 2.4 million unemployed people. Of these, 2 231 650 people successfully graduated from the programme in the period between the programme’s inception to August 2015. A major indicator of the effectiveness of the programme is the employability of its graduates. TESDA has conducted Impact Evaluation Studies (IES) to monitor and assess the efficiency and effectiveness of TVET based on the employment outcomes of its graduates. The employment rate for TWSP graduates has increased from 55% in 2008 to 71.9% in 2014, which exceeds the national average employment rate of 62% for general TVET graduates.

Relevance and responsiveness to skills needs of the industry

Employers were categorical in saying that TWSP is relevant and responsive to their needs. With the programme, employers were afforded the opportunity to hire better-trained and qualified workers from among the TWSP graduates. In a way, TWSP can be considered as a kind of government incentive or subsidy for the training costs that would have been normally incurred by employers.

The Philippine Software Industry Association (PSIA) was one of the earliest participants in TWSP. A representative from PSIA noted that the programme was an effective response to a shortage of skills in the IT sector in 2006. Graduates from IT courses were failing to meet the requirements of the industry, which required skills in new technologies including COBOL, Java, Microsoft and Oracle.

After the industry approached President Arroyo with their concerns, TESDA was instructed to meet with PSIA to help to develop a bespoke training programme. PSIA identified trainers who were industry practitioners. Subsequent TWSP graduates had an almost 100% employment rate, in part because companies in the software industry had taken part in the recruitment and selection of programme participants.

Similarly, the Information Business Processing Association of the Philippines (IBPAP) noted that the TWSP “did a lot for the industry” particularly in addressing the shortage of call centre agents. The government provided PHP 500 billion (USD 10.65 million) for remedial training which produced 40 000 call agents and 30 000 graduates in other skills needed by the ICT sector, including animation, medical transcription and computer hardware servicing. The IBPAP served as an intermediary for the training involving various establishments in the sector. The TESDA and IBPAP collaborated in developing the Training Regulations for the various courses to address the skills need of the sector. According to IBPAP, the employment rate for all the graduates averaged 70%.

The training centre of the Philippine Society of Plumbing Engineers (PSPE) had produced almost a thousand plumbers since 2009, thus addressing the need for certified plumbers in the booming construction industry. PSPE notes that big construction companies subsequently hire most of the TWSP participants who complete on-the-job training in their enterprises. The Society notes that there is no longer a shortage of plumbers in the construction industry, based on fewer requests received from recruitment agencies for plumbers for overseas employment.

TESDA is able to respond quickly to the skills need of firms. For example, in 2014, four establishments needed 100 skilled workers in articulated driving. Since the TR for this skill is already available, the training programme was conducted in the work premises of the establishments and the employment rate for graduates was almost 100%. Another firm that registered as a TVI was able to train 600 people in skills required to handle advanced technology, including industrial automation, instrumentation and control servicing, and electrical installation and maintenance. Another establishment in the butchering industry registered as a TVI and conducted a course on butchering appropriate for its “world class” facilities. The training, however, was undertaken only once. The firm hired its own employees and the other graduates easily found jobs locally and abroad.

In 2014, Semiconductor and Electronics Industry in the Philippines (SEIPI) conducted training for 3 400 operators urgently needed by the semiconductor industry. This was done through five companies which registered as TVIs. In the past, SEIPI had a cadetship programme for the operators, which took six months to complete. With the training curriculum formulated by the industry representatives and TESDA, the duration of the training was reduced to five days classroom and five days of hands-on-training. Most importantly, the training was actually conducted in the enterprises. The SEIPI representative stated that 95% of the graduates were employed. In 2015, SEIPI has been granted 7 000 scholarships in five newly approved training regulations for the industry. These priority TRs were identified through industry consultations. Representatives from some of the IBs raised administrative concerns regarding the differences in documentary and administrative requirements between TESDA offices, including with respect to proposals, delays in approvals and payments and a lack of a feedback system.

Partnership of TESDA and Industry in the identification and formulation of training regulations

In 2004, the TESDA Board promulgated a policy that all training programmes should have a TR. It is worthy to note that through various industry consultations, as reported in the LMIRs, priority TRs have been identified. TRs assure quality training as it is competency- and outcomes-based and contain minimum standards for trainers, training tools, equipment and facilities. The competencies cover three areas: basic (such as work values, communication and analytical skills), common (skills specific across the industry), and, core (qualifications that are distinct to the trade). The Philippine TRs are benchmarked with the Australian competency-based training and education framework. The TR System is ISO certified. As emphasised by the TESDA Director of the Qualifications Standards Office (QSO), employers must be involved in the process of determining TRs because they have direct knowledge of the skills needs and processes of the industry. It is also important that establishments recognise the value of TRs and commit to utilise them.

There are over 230 qualifications and courses included in the TWSP implementation. The IBPAP was involved in formulating nineteen TRs for the industry. The PSPE was actively involved in formulating three TRs on plumbing. SEIPI was instrumental in completing five new TRs for the semi-conductor industry. As mentioned earlier, four establishments collaborated in the development of the TR for articulated driving and conduct of training in their premises. One establishment was instrumental in developing the TRs for Mechatronics.

Representatives from TESDA also highlighted the importance of regularly reviewing and updating these TRs so that they are aligned with new technologies and industry processes. These TRs can be a good starting point for skills standards to be established at the ASEAN region as the economies start integration. TESDA will continue to pursue the review of the TRs more aggressively through IAs and establishments that registered as TVIs.

Employer engagement in skills development

The objective of “empowering training providers and expanding their absorptive capacity” was accomplished with the greater involvement of establishments and IAs in the actual conduct of skills training. The employers interviewed highlighted the TWSP as a training programme that promotes the “balance of theory and skills” where their trainees gain theoretical perspectives alongside practical experience. Because they “know best their skills needs, the work processes and technologies of their industry,” employers are able to provide appropriate and relevant on-the-job training. Moreover, the trainees are immersed in the actual work setting where they are able to train using “state of the art and up-to-date machines, equipment and tools.”

In the course of the case study, the following models of training delivery were identified:

• TVIs conduct training to respond to (and supply) the specific skills needs of establishments that seek their training services. The TVI justifies its application for scholarship vouchers by presenting documents to TESDA that contain the actual skills requirements of the establishments.

• Private and public TVIs are selected by TESDA to conduct training for specific qualifications or courses.

• Employers or groups of employers register as TVIs to conduct training for their own requirements. For example, a firm that initiated an enterprise-embedded Mechatronics course in 2006 established its own training centre that is separate and independent from its industry operations. It conducts other training courses in addition to Mechatronics which continues to be covered by TWSP.

• Industry Associations such as the SEIPI and the PSPE establish their own training centres to conduct trainings. PSPE also undertakes a lot of other related training and development activities over and above the training for plumbing. It is worthy to note that the PSPE made a declaration that “the training center they established did not receive any financial assistance from the government”. The training centre of SEIPI was recently established in 2014. Likewise, it was the IA that funded the establishment of the training centre. As mentioned earlier, before this happened, there were five member establishments which registered as TVIs.

• Industry Associations which co-ordinate the conduct of training for the need of their member establishments and institutions such as IBPAP, PSIA, ACPI, and HMOAP.

TESDA does not have reports on the number of establishments that registered as TVIs. Once establishments register as a TVI, they are not accounted in terms of “establishments that became TVIs.” Moreover, there is no information to account for the accomplishments of IAs as a co-ordinating body. This information would have been useful to determine how many establishments became directly involved in training and how effective the IA was in co-ordinating the training programmes.

In the aftermath of the skills crisis experienced by the sector, the IBPAP initiated a project which involved the design and development of the Global Competitiveness Tool, an online test to assess the skills gap between new ICT graduates and newly hired employees. Twenty thousand individuals took the assessment and the results were utilised to identify the skills gaps, those who are “job-ready,” and to determine the remedial training courses needed. TWSP applicants and participants took the assessment tool. IBPAP used this information further to propose a new specialisation on Service Management under the Bachelor’s degree in Business Administration, which has been approved by Commission on Higher Education (CHED). It contains a mandatory on-the-job component held at IT firms. This course has been deployed in 39 colleges and universities. The latest innovation is that this course is now offered on-line through the University of the Philippines Open University (UPOU). It is reported that about 300 initial enrollees are Filipinos working abroad (IBPAP Breakthroughs, March 2015).

In the case of PSPE, it partnered with the Professional Regulation Commission (PRC) to develop and design training courses for Master Plumbers, which build on the three TRs they have developed. The completion of said courses will enable them to comply with the continuing professionalisation of education requirements of the PRC for the renewal of their licenses. The association is also working on a new law that will strengthen and modernise the practice of their profession as the current law was passed way back in 1956.

Learnings and insights gained towards revitalising the Industry Boards

The experiences gained in the partnership of TESDA and the IAs should provide insights towards revitalising the Industry Boards and the Industry Training Centers as envisioned in the NTESDP. These “new breed” of Industry Boards may become the role models for the IBs contemplated in the NTESDP (2011-16).

These IAs are self-reliant, well-organised with permanent full-time staff and substantial membership from the establishments, professional and other stakeholders in the sector. They are quite different from the Industry Boards of the past, which were dependent on the funding from the then NMYC. Their operations are funded from fees and contributions of their members. Member organisations of IAs typically include over half of the companies in the sector. IBPAP has 300 members which also include six associations with their member companies (the Animation Council of the Philippines Inc., Contact Center Association of the Philippines, Game Developers Association of the Philippines, Global In-House Center Council, Healthcare Information Management Outsourcing Association of the Philippines and Philippine Software Industry Association). For example, the latter currently has 100 member companies.

PSPE has been in existence for ten years and has 600 members coming from master plumbers, small contractors and various engineering professions. It maintains a modest training centre but is equipped with state-of-the-art plumbing tools and machines. Through a partnership agreement, the training centre is able to use standard plumbing supplies and materials for the trainings, as these are donated by big construction companies and suppliers All their trainees complete two months of on-the-job training at actual construction sites of two of the biggest construction companies in the Philippines.

SEIPI, with 265 members, is the largest association of Filipino and foreign electronic companies in the Philippines. The electronics industry is one of the ten priority sectors identified in the Philippines Development Plan 2011-16.

It is important to highlight that IBPAP and SEIPI have formulated their respective Industry Road Maps. For IBPAP, its Roadmap of 2011-16 targets the creation of 1.3 million jobs by 2016. It sees its role as pivotal in “sustaining the rapid growth of the IT-BPM industry by working to ensure supply of high-quality labour” and in “obtaining government support in the area of remedial training and educational reform at all levels.”

The SEIPI Road Map identifies the support needed from TESDA in terms of scholarships and development of training programmes and training regulations. A recent noteworthy development was the appointment by the President of the Philippines of the current SEIPI President as TESDA Board Member, representing employers for a three-year period with possible extension. This can be appreciated as recognition of the accomplishments of the IA and will likely result in greater employer involvement in TESDA programmes.

The IAs promoted continuous learning towards building a community of practice in the sectors. They have organised themselves into committees with regular meetings and discussions on new issues and trends, best practices, and other concerns to sustain the growth of the industry. IBPAP has done several summits on Information Technology. PSPE conducts regular trainings, workshops, and exhibits for its members in Luzon, Visayas, and Mindanao. It also conducts an Annual Convention of its members. They have built a wide network of partners to complement each other and share best practices. The IAs also produces technical journals, newsletters and other publications. They have been able to tap additional funding sources from government and foreign aid granting institutions for their strategic initiatives.

The Strengths of the Programme

The TWSP has enjoyed strong support from the government and funding has expanded over the programme’s history. The establishments view the programme as responsive to their skills needs and priorities. The TWSP has provided incentives to TVIs and firms to undertake skills development, much like a subsidy for establishments for the training of newly recruited workers.

The government promoted a holistic approach in helping and engaging the industries in skills development and utilisation. A major factor for this is the organisational set-up of TESDA. Its highest policy making body, the TESDA Board, is composed of members from various government departments, representatives from the employers, industries and workers.

Similarly, government bodies have assisted IAs in developing long-term plans towards skills development. The Department of Trade and Industry assisted SEIPI in the formulation of its roadmap. The CHED assisted the IBPAP in many initiatives already mentioned elsewhere in this report. The Department of Science and Technology and its agency, the Information, Communication and Technology Office, gave financial and technical assistance to IBPAP in the formulation of its roadmap. These road maps highlight the need for and the importance of a talented and skilled workforce.

Another facilitating factor is that TESDA has rationalised its structure, specifically, with the objective of encouraging more industry participation. As earlier mentioned, an Office on Partnership and Linkages was created for this purpose. TESDA has initiated and convened numerous meetings, fora and summits on TVET and consultations with industry associations on their skills requirements. There are also capacity-building programmes for the officials and technical staff of TESDA on effective strategies and approaches in engaging the industries to support TESDA and in coaching skills to better evaluate and assess needs of industry partners. TESDA has embarked on the ISO certification of its various work processes such as the Development of Training Regulations, Competency Based Assessment Tools, Programme Registration, Assessment and Certification. For three years now (2008, 2011 and 2014), TESDA has undertaken an Employers Satisfaction Survey which provides information on the overall satisfaction of employers with TESDA graduates, their skills demand, the skills upgrading given to their workers, and their suggested improvements of TESDA programmes, among others.

Another positive contributing factor is the reputation of TESDA as an expert provider of technical-vocational education. This has been complimented by improved perceptions of vocational education pathways, ensuring that there is now value and recognition associated to a TESDA certification. Certified TESDA graduates are most likely to be employed both in local and foreign jobs. The budget of TESDA has increased from PHP 2.3 billion (USD 49 million) in 2005 to PHP 7.38 billion (USD 157 million) in 2016. The high regard for technical-vocational education is also due to new policies on the ladderized education system and the Philippine Quality Framework (PQF) initiated by TESDA.

Weaknesses of the Programme

Weak administrative mechanisms

The data, information and reports on the TWSP are disorganised, incomplete and are not up-to-date. There is no master list of TVIs accredited for trainings. There is no breakdown of the budget for each region and province and for TVIs. As earlier mentioned, TVIs are not categorised as establishments or mainly suppliers of skills. The Project Management Office does not maintain a database on the TWSP that can be readily accessed by researchers. The District Offices were not able to provide situational and accomplishment reports. Data and information were also not readily accessible in the IAs interviewed.

The major source of data is nationally collected TVET Statistics (2005-11). However, this data is not complete or holistic, and there is no information on the number of graduates by qualifications and by sector. The Philippine Commission on Audit (COA), in its 2012 Audit Report on TESDA, stated that the government spent nearly PHP 230 million (USD 4.9 million) for the scholarship programme but failed to immediately provide jobs to at least 60% of the graduates. COA explained that it only managed to check 211 graduates out of over 24 000 but, it was alarming that of the 211 151 could no longer be located due to invalid contact addresses. In the same report, two loopholes were identified: the absence of a penalty clause in the agreement between TESDA and the training schools, and lack of a monitoring system on the employment status of participants. There were also no evaluation procedures on courses with few enrollees and low employment rates. Graduates were not required to report their employment status to TESDA or the training school (Philippine Daily Inquirer, 2012).

In 2011, TESDA established a Unique Learner Identifier (ULI) for tracking graduates. The ULI is a personal 12-digit alphanumeric code generated and allocated to TVET students. The ULI was intended to form a central record of learning experiences, assessment results, assessment results and qualifications, but the programme was ultimately discontinued.

Increased and more effective monitoring systems should have been implemented alongside the huge increase in government investment in TWSP. It is critical to have information about the employment status and skills of graduates. That there are almost 30% of graduates who are not able to find work after training should be a cause for concern, not to mention the major loss of the investments made for their scholarships. Relatedly, information on whether skills shortages have been addressed is also not available.

Similarly, TVIs and IAs complained of administrative processes such as delays in the approvals of the vouchers, which in turn delays the provision of training. There were also instances of delayed payments for training services rendered. In 2011, 12 training centres complained that they had not received almost PHP 1 billion for training services rendered under TWSP. In response to the complaint, additional funds were committed to the programme. (ABS-CBN, May 5, 2011).

Approximately one third of TWSP scholars are college graduates or undergraduates, who may not be the target beneficiaries of the programme. This can undermine the ability of unskilled unemployed people to access training services. Similarly, poor management and record keeping between TESDA offices has resulted in reports of students claiming more than one scholarship from different districts. Recruiting participants to the TWSP could also benefit from the input of other government departments, including the public employment service.

Capacities and selection of TVIs

There are 4 000 TVIs that may apply as training providers. The major criterion for acceptance as a TVI for the purposes of TWSP is a proven track record in terms of the employment rates of their participants. However, given inadequate information on graduate performance, the selection process is constrained. There were comments given that “some TVIs are there for the business and some are favored due to political considerations,” and that “scholarship vouchers are given out by some politicians.”

Similarly, many TVIs lack the capacity to deliver training appropriate for the TWSP. PSIA noted that many IT training providers employ teachers without industry experience. One IA raised the concerns that “some TVIs do not have competent trainers to conduct effectively the training even if they utilized and supposedly followed a well-developed TR that the IA has developed.” Another IA also commented that their industry has developed a revised TR for Call Agents but some TVIs are still using the old TR for said course. Relevant to this concern is the lack of information on the performance of TVIs, in terms of graduates and passing rates in the assessment examinations. Systematic collection of this information could help to enable better and more informed decisions on the selection of TVIs to be provided scholarship grants.

Lack of clear parameters for the identification of priority skills

It is not clear how priority skills are determined at the provincial and district level. While regional offices are obliged to report on skills demand and supply, there is a lack of transparency regarding the process of utilising data to determine local labour market conditions. This may be a function of the lack of a strong working relationship between TESDA and the Bureau of Local Employment, who are mandated to develop labour market information.

Institutional mechanisms could be harnessed to provide relevant and timely labour market information, including the Provincial Technical Education Skills Development Committee; the PESO, representing the local government; the Association of TVET Providers; and IAs. While there are industry fora and consultations conducted, it appears that these are not institutionalised or convened regularly.

Both DOLE and TESDA generate a lot of reports and information that can be inputted into the LMIS. There are no protocols on how all these information are brought together, validated, calibrated and translated into plans and targets. There appears to be much leeway on the part of the Provincial/District Director to make the “judgment call” on the list of TVIs, the courses to be offered and the number of scholars. A relevant organisational issue that needs to be looked into by TESDA is the understaffing at the Provincial/District level, where there are only eleven staff which perhaps prevent them from performing their mandates of overseeing, linking and co-ordinating with relevant stakeholders and institutions, identifying priority skills needed, identifying the TVIs, evaluating the performance of TVET providers, and monitoring the graduates. One senior technical staff in the regional office mentioned that the office needs a server given the large data files they maintain but there is no budget for this.

Many ministry departments fail to effectively engage employers in skills development and utilisation

There are many programmes in DOLE and TESDA that have overlapping and duplicating aims which could be merged. For example, DOLE and TESDA have both established concurrent skills profiling and career guidance systems. Information and career guidance services are spread across DOLE and TESDA, while unemployment registries have been piloted in some regional offices of the public employment services. As these data are related and complement each other, merging their use could help inform policy making decisions. Similarly, there are potential complementarities associated with the JOBSTART programme, an initiative funded by the ADB which also aims to respond to unemployment amongst young people.

The role of the PESO is not well defined in the TWSP

It is noted that very few TWSP graduates utilise the PESO for job placement and employment facilitation. In the latest IES, it was revealed that only 2.4% or 10 080 out of 450 000 TVET graduates utilised the PESO. Moreover, TESDA established Blue Desks which functions overlap with the PESO, as it also performs career counselling, job placement and employment facilitation services. It is noted that the functions and activities of the PESO, as in the case of the Quezon City PESO, are not focused on its core functions on employment facilitation, career guidance and labour market information. It is also involved in other programmes of DOLE, which are nonetheless important, such as anti-illegal recruitment, elimination of child labour, promotion of industrial peace, promotion of social protection, promotion of clean and green environment projects, and anti-bullying. From a TESDA perspective, “the PESOs should be more proactive in relating with TVET providers.” The 2015 Annual Report of the QC PESO included among its performance indicators the “youth provided with bridging employment” where TWSP was listed as a programme. However, there was no information on the number of target TWSP graduates to be assisted which may indicate a low priority given to this programme by the PESO.

Recommendations to improve the programme

DOLE and TESDA should collaborate more to ensure that TWSP scholars are given a complete package of assistance and are guaranteed decent jobs

To address the weaknesses earlier identified and to better utilise the funding for the scholarship programmes of TESDA, it may be worthy for the two agencies to collaborate to ensure that participants are given a complete package of assistance and that their participation in the programme will provide better job opportunities. The DOLE has an expansive budget to provide career guidance, counselling and lifelong learning skills to unemployed young people, which could easily be mobilised to assist TWSP students and graduates. This could also help the government maximise its investment in the TWSP and improve the employment rate for the relevant scholars. The programme should be supported by a strong and effective monitoring and tracking system of the graduates.

A very crucial issue that needs to be resolved by DOLE and TESDA is: who should really be the target beneficiaries. As it is implemented, the TWSP has become an “omnibus” window or programme for all unemployed. It may be best to refocus the TWSP on the unemployed youth that are unskilled and really helped those “who have been left behind.” The other beneficiaries, e.g. returning OFWs, displaced workers, the educated and skilled unemployed may be covered by the other programmes of TESDA. There may be a second and separate programme category within the TWSP that can be created to encourage IAs and establishments to undertake skills upgrading.

Strengthen the Labour Market Information System (LMIS)

The TWSP must be supported by a labour market information system that provides relevant and timely signals and information on industry trends and employment opportunities, as well as reliable estimates on the demand for TVET services, ideally at the provincial/district level. The various stakeholders and duty-bearers should be identified. Clear accountabilities should be established. Several institutional mechanisms that are already in place need to be co-ordinated and orchestrated and existing databases can be connected. For example, the TVIs should be well connected with employment facilitation and placement offices.

There is the new law on PESO that mandates the creation of PESOs in all local government units and technical assistance to be provided by DOLE. PESOs are envisioned to be transformed into a “modern public employment service intermediary and provides multi-dimensional employment facilitation services”. They will be provided permanent, career fulltime staff and operating budget from the Internal Revenue Allotment of the LGUs. Given these developments, there are prospects to rationalise and improve the generation of labour market information at the provincial/district level. As the PESO is an organic unit of Local Governments, it will have opportunities to access information that are vital or critical to the LMIS. The PESO should be the first in the field to get labour market signals of new industries and companies being set-up or of companies expanding their operations in the province/district level through their business permit offices and other appropriate offices. For example, IBPAP has already identified in its roadmap the “Ten New Wave Cities,” the new IT‐BPM Hubs where the prospects for growth of the sector are good and there is a projected need for skilled IT workers. The PESOs in these cities should have already geared up and prepared a plan for this eventuality. Likewise, inasmuch as SEIPI has already forecast 7 000 jobs, the PESOs should have actively linked with SEIPI.

Corollary to this is the need to put in place systematic and continuing capacity development programmes for the PESO, DOLE and TESDA, especially on how they can work together and the technical trainings needed to ensure a working and effective LMIS, including standards and manuals of operations. The BLE, with assistance from the ILO, has already developed a PESO Starter Kit: Guide to Understanding the Public Employment Service Office, which is already a good start. DOLE should continue recognising best performing PESOs.

Undertake a programme review of the TWSP and improve programme planning, design implementation, monitoring and evaluation

A programme review of the TWSP should be undertaken to address the various issues and concerns raised on administrative problems and system inefficiencies, and review the relevance and viability of existing policies. For example, some of these policy concerns would be on the need to provide a penalty clause for failure to meet employment commitments; on defining and determining the period of time for the subsidy; on establishing the appropriate employment rate, i.e. should this be uniform (60%) or will it vary across sectors; and on how IAs and establishments can partner in the effective delivery of the training programme, from recruitment to placement.

As suggested by COA, there is a need to formulate and evolve assessment tools to measure the extent to which identified skills shortages have been addressed. For example, while PSPE mentions that there appears to be no shortage for plumbers, this is belied by information from a representative from the Philippine Constructors Association that there are shortages, not only of plumbers, but, also of other construction skills being felt by construction industries. He cited that for their construction projects in Iloilo, plumbers and other construction workers have to be hired from Manila and Cebu. Another example, in 2006-09, there were 18 700 baristas trained and this course continues to be offered to this day. How many more baristas will be needed by the tourism sector?

There is no policy on the length or the period of time establishments are entitled to scholarship grants as well as limits on the grant amount. For example, one company has been enjoying the grant since 2006 or for nine years now. It trains for its sister company, which is a service company, and supplies graduates to its client agencies. SEIPI is supported with 7 000 scholarships in 2015. Even with a minimum cost of PHP 5 000 per participant, the amount involved of 35 million pesos (USD 75 000) is substantial. For how long should this scholarship grant continue for the semi-conductor industry? Big establishments (e.g. Makati Development Corporation) are also accessing TWSP. This issue has an implication on the government subsidising skills-development where the company may already be in a position to provide for this expense. Again, there is an equity issue as there can be other companies, most specifically small and medium scale industries, which are also deserving and needing of help. A policy which will address these concerns should be promulgated by TESDA.

By providing a stricter policy on employment commitments which may include penalties, establishments and TVIs shall be made more accountable. The rise of employment rate of TWSP graduates to 70% should already indicate the need to revise the current requirement of 60% employment rate.

Technical Assistance Programme for IAs/IBs

As early as 2004, TESDA has identified four sectors (health, tourism, ICT and agri-fishery) as priority for the development of Industry Boards. With PSPE, SEIPI and IBPAP as “role models” of IAs engaged in skills development, DOLE and TESDA should promote, encourage and assist in the creation of Industry Associations, which can become effective mechanisms to ensure direct participation of employers and workers in the design and implementation of skills development programmes. There may be a need to formulate a technical assistance programme for TESDA and IAs that will include the crafting of policies that will encourage and expand industry participation, skills upgrade, as well as the financing arrangements. The TWSP can continue to be utilised for this purpose.

An IBPAP representative commented that they have had no opportunities yet to discuss with TESDA regarding the IA evolving and becoming an Industry Board, as envisioned by law. On the Training Development Fund, one IBPAP Executive said, “this is like a placement fee, as companies who recruit graduates will pay the fee.” She added that if it is the company undertaking the training and employment of the graduates, it is not clear why it should pay a training fee. According to the IBPAP representative, the fund that has been collected so far is still with the association. TESDA should clarify the mechanics of the utilisation of the Training Development Fund.

There should be initiatives to increase awareness on the part of employers, especially in small and medium scale industries on schemes for employers’ participation in skills development through Industry Associations. The other agencies of DOLE like the National Wages and Productivity Commission, which are helping small and medium scale industries, may be tapped for this purpose. The relevant government agencies can be tapped to help these IAs formulate their Industry Road Maps, as was undertaken by DTI for SEIPI and DOST for IBPAP. For example, the Department of Agriculture should be tapped in helping the agri-fishery industry as a priority sector.

Consider other forms of assistance to employers other than scholarship grants.

Some examples of other forms of assistance have been suggested by the IAs. PSPE mentioned allowing the use of idle government buildings for their training. SEIPI raised the possibility of providing incentives for companies that allow their experts to have time-off when they are involved in the crafting of TRs, as well as in their necessary revisions, given rapid changes in technology and work processes. There is a need to build a pool of trainers in critical industries with projected skills shortages and provide incentives to encourage them to stay in the country.

Potential Transferability

This study showed the viability and benefits of the TWSP. It improved the employability of the unskilled, poor and unemployed youth in the Philippines. Through the programme, establishments were encouraged to participate in skills development and utilisation. Moreover, several establishments within an IA also collaborated to address their skills need. And this arrangement provided learnings and insights towards expanding the role of IAs and IBs in skills development. The programme also increased training capacities of TVIs. The programme produced Training Regulations which were intended to improve the quality and standards of skills training. There were weaknesses that were identified which can be attributed to the large-scale operations of the programme and the inefficiencies and inadequacies of the administrative and support mechanisms. There were also governance issues related to better transparency in the selection of TVIs and the involvement of the political leaders.

There is scope and potentials to further expand the programme and improve its impact. The programme needs to be redesigned and refocused towards better targeting and selection of the beneficiaries, capacitating and strengthening the roles of key stakeholders, most especially the PESO in generating LMI, tightening the criteria for the scholarship grants and improving monitoring and performance evaluation. It is worthy to consider implementing the programme at the lowest political and administrative unit of the community, e.g., the barangay, where accountabilities may be better identified and the support and commitment of the community leaders and constituents are harnessed.

The TESDA and the DOLE should leverage the programme to encourage establishments and industries to engage in skills upgrading in the context of the on-going integration of the economies of the ASEAN and the rapid changes in technology and work processes. It is also important to mainstream the programme in small and medium scale industries in the country.

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